Asia Stock Selloff Eases as Yen Weakens With Gold

A global equities selloff that spurred the biggest drop in Japanese shares since Donald Trump’s election eased as demand for haven assets ebbed. The yen halted a seven-day rally and gold retreated.

Japan’s Topix fluctuated while Australian and South Korean shares rose after the S&P 500 Index nudged higher. Treasury 10-year yields were steady after four days of losses. The kiwi was little changed after New Zealand’s central bank kept its benchmark rate at a record low 1.75 percent. Oil futures climbed.

The gains in U.S. equities provided a measure of calm to the market after a selloff spread across Asia on Wednesday. Volatility spiked before a Republican health-care bill is set for a vote in Congress. Lawmakers have signaled any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Donald Trump’s election in November. The depth of selling drew some investors back in on speculation the drop went too far given data showing strength in the global economy.

The selloff was the biggest for stocks since Trump’s election. Equities had largely escaped investors’ efforts this year to unwind so-called Trump trades. While the dollar has fallen 4.5 percent from a January peak, global stocks have climbed to new highs, with the MSCI All Country World Index reaching a record last week.

Here are the main moves in markets:

Stocks

The Topix rose less than 0.1 percent as of 2:45 p.m. in Tokyo, after plunging 2.1 percent on Wednesday.

The Bloomberg Dollar Spot Index was little changed after a six-day slump, the longest string of losses since early November. The yen fell 0.2 percent to 111.37 per dollar, after reaching the highest level since November on Wednesday.

The Australian dollar dropped 0.2 percent and the New Zealand dollar rose less than 0.1 percent.

The British pound was little changed after London’s worst terror attack in more than a decade. Five people died, including the assailant and the police officer he stabbed, and at least 40 injured.

Bonds

The yield on 10-year Australian government bonds was little changed at 2.76 percent.

The yield on 10-year Treasuries was flat at 2.41 percent after dropping in the previous four sessions.

About the Author

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: samed@investorsking.com.

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